The dynamics of inter-firm networks in the course of the industry life cycle: the role of appropriability

This paper examines the dynamics of inter-firm networks and introduces a conceptual framework for explaining why inter-firm networks change over time. The framework is based on the idea that patterns of inter-firm linkages are linked to the life cycle development of an industry. Special emphasis is placed on the role of appropriabiliy, i.e. a firm's ability to capture the profits generated by its innovations. The (trans)formation of inter-firm networks in three industries is examined and used to illustrate the relevance of the framwork. One important inference from our study is that public policy makers and manageers should take into account the phase of industry development before implementing policies to create and/or change inter-firm networks.     

Vertical integration as a remedy for imbalances in the ‘Porterian’ value system. The Dutch financial securities industry at the beginning of the 20th century

The way of accounting for vertical integration, of this paper is based on the ‘Porterian’ value system and focuses on the relation between the creation and appropriation of value. The essence of a value system is that at each stage in the system value is created and added to the value created at previous stages. We propose that firms which are unable to appropriate the value they create at the stage they currently inhabit, would find it advantageous to integrate vertically towards stages offering a more attractive relation between value appropriation and value creation. This argument will be illustrated here by the case of a large Dutch bank that integrated vertically towards securities trading.     

Art and Appropriability in Renaissance Italy and The Netherlands in the Seventeenth Century: The Role of the Academy

The concepts selection systems and appropriability are used to discuss the developments of the competitive process between painters and the strategic choices open to them in Renaissance Italy and The Netherlands in the seventeenth century. The presence or absence of an academy, an institution such as the Florentine Accademia del Disegno, is seen to be a crucial factor with respect to safeguarding appropriability in the new selection system that replaced market selection.     

Science and industry: a theory of networks and paradigms

The recent interest in 'network' forms of organization serves as a starting point to understand better the dynamic characteristics of technology development. Network theory allows one to describe the relationship between 'actors' involved in the development of new technologies, both cross-sectionaily and longitudinally, and, as a consequence, to model the structural and behavioural developement of a community of actors (regardless of whether this 'community' is defined as a set of individuals, e.g. the 'scientific' community, or is defined as a collection of organizations, e.g. an industry). In this paper, this network approach is used to develope a theoretical framework to undersiand the knowledge transition from 'scientific' paradigm status to a 'technological' paradigm status. It is belived that the propositions made in this paper will enable truly empirical studies on the nature of the development of 'scientific' and 'technological' paradigms.     

Value Chain Envy: Explaining New Entry and Vertical Integration in Popular Music*

abstract The concepts of value creation, value capture, and value protection are employed to explain new entry and vertical integration. It is posited that if, at one stage of the value system, the share of value captured is disproportionally higher than the share of value created, value chain envy will ensue. This value chain envy will result in new entry and vertical integration towards that desirable stage provided that the means of value protection available to the incumbents can be overcome. Within the popular music industries, the value created at the stage of music publishing has diminished steadily over the course of the 20th century, but the value captured has remained high. This has triggered value chain envy both inside and outside of the value system. The data presented in this paper show high levels of vertical integration into that stage originating primarily from the stages upstream in the value system, while the level of new entry has been comparatively low. At the same time, the data indicate that the recent introduction of new information communication technologies (ICT) have not significantly affected the levels of new entry and vertical integration into music publishing.     

Public Policy and Innovative Capabilities: The Case of Philips' IT Activities

The main aim of this paper is to analyze the impact of public policy on innovative capabilities of firms, focusing on, on the one hand, the measure of sheltering provided by the policies and, on the other hand, the effects of policies on industrial life cycles and on the life cycle related patterns of firms' behaviour. The paper deals with one sector, IT, and discusses EU and Dutch policies directed toward this sector. Furthermore, a case will be presented concerning Philips' ventures in the IT sector. The way in which public policy influenced the innovative capabilities of Philips helps to explain the relative success of the various projects.     

Public Policy and Innovative Capabilities: The Case of Philips' IT Activities

The main aim of this paper is to analyze the impact of public policy on innovative capabilities of firms, focusing on, on the one hand, the measure of sheltering provided by the policies and, on the other hand, the effects of policies on industrial life cycles and on the life cycle related patterns of firms' behaviour. The paper deals with one sector, IT, and discusses EU and Dutch policies directed toward this sector. Furthermore, a case will be presented concerning Philips' ventures in the IT sector. The way in which public policy influenced the innovative capabilities of Philips helps to explain the relative success of the various projects.